COMMON STOCK

Common stock is a kind of company ownership. Common stock is categorized as security in online stock trades. The term common is given to distinguish it with the preferred stock in online stock trades. Whenever any bankruptcy occur in any company in online stock trades, share holders of common stock receive their funds after the preferred stock holder, bond holders etc. It is quite riskier as compare to the preferred stock holder. But in normal working situation, common stock works more proper and reliable as compare to the preferred stock.
Common shares have the facility of voting, although not all the time but still they got this opportunity. Common stock share holder of online stock trades can influence the company decisions, their policies, and their objectives and even during election of board of directors, these common share holders of online stock trades can take part through their voting power and sometimes their voting facility can change the decision of the company. Some sort of preemptive rights are also allocated to some common stock holder from the online stock trades which enables the shareholder to maintain their ownership in the company for long term.
Two main advantages are received by the common stock shareholders from the company; (1) Capital appreciation and (2) Dividend.
When the stock prices become high in the online stock trades market from the price level at which the share holder had purchased it, so it will become the capital appreciation for the shareholder. And the common stock shareholder receives its profit by selling the shares in the online stock trades market at the current online stock trades’ market rates.
The second one is dividend, which is taxable payment. When the company earns profit than it pays a specific percentage of profit to the online stock trades shareholders. Normally these dividend are paid after every three months.